Hidden Action, Identification, and Organization Design
AbstractIncentives often fail in inducing economic agents to engage in a desirable activity; implementability is restricted. What restricts implementability? When does re-organization help to overcome this restriction? This paper shows that any restriction of implementability is caused by an identifi cation problem. It also describes organizations that can solve this identifi cation problem and provides conditions under which such organisations exist. Applying the findings to established and new moral hazard models yields insights into optimal organization design, uncovers the reason why certain organization designs, such as advocacy or specialization, overcome restricted implementability, and formalizes a wide-spread type of multi-tasking problem.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Heidelberg, Department of Economics in its series Working Papers with number 0505.
Date of creation: 26 Nov 2010
Date of revision:
Note: This paper is part of http://archiv.ub.uni-heidelberg.de/volltextserver/view/schriftenreihen/sr-3.html
Contact details of provider:
Postal: Grabengasse 14, D-69117 Heidelberg
Phone: +49-6221-54 2905
Fax: +49-6221-54 2914
Web page: http://www.awi.uni-heidelberg.de/
More information through EDIRC
moral hazard; hidden action; implementation; multi-tasking; identification by organization design;
Other versions of this item:
- Schnedler, Wendelin, 2010. "Hidden Action, Identification, and Organization Design," IZA Discussion Papers 5325, Institute for the Study of Labor (IZA).
- Wendelin Schnedler, 2010. "Hidden action, identification and organisation design," The Centre for Market and Public Organisation 10/250, Department of Economics, University of Bristol, UK.
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
- M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Macho-Stadler, Ines & Perez-Castrillo, J. David, 2001.
"An Introduction to the Economics of Information: Incentives and Contracts,"
Oxford University Press,
edition 2, number 9780199243273, September.
- Macho-Stadler, Ines & Perez-Castrillo, J. David, 2001. "An Introduction to the Economics of Information: Incentives and Contracts," OUP Catalogue, Oxford University Press, edition 2, number 9780199243259, September.
- Jenny Kragl & Anja Schöttner, 2012.
"Wage Floors, Imperfect Performance Measures, and Optimal Job Design,"
Working Paper Series of the Department of Economics, University of Konstanz
2012-36, Department of Economics, University of Konstanz.
- Schöttner, Anja & Kragl, Jenny, 2013. "Wage Floors, Imperfect Performance Measures, and Optimal Job Design," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79941, Verein für Socialpolitik / German Economic Association.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gabi Rauscher).
If references are entirely missing, you can add them using this form.